44. If an ammonia plant that produces 250 tons per year cost P120 million to construct 8 years ago, what should an 800 ton per year plant cost now? Suppose that the construction cost index has increased an average rate of 10% per year for the past eight years and that the cost capacity factor to reflect economy of scale is 0.75. O P670.70 million O P580.67 million O P710.87 million O P615.44 million
44. If an ammonia plant that produces 250 tons per year cost P120 million to construct 8 years ago, what should an 800 ton per year plant cost now? Suppose that the construction cost index has increased an average rate of 10% per year for the past eight years and that the cost capacity factor to reflect economy of scale is 0.75. O P670.70 million O P580.67 million O P710.87 million O P615.44 million
Chapter9: Capital Budgeting Techniques
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![44. If an ammonia plant that produces 250 tons per year cost P120 million to construct 8 years ago, what should an 800 ton per year plant cost now?
Suppose that the construction cost index has increased an average rate of 10% per year for the past eight years and that the cost capacity factor to
reflect economy of scale is 0.75.
O P670.70 million
OP580.67 million
O P710.87 million
O P615.44 million](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F8e732843-3ece-413e-a8e2-d1f399d44893%2F9a6367f3-a855-4f31-ab93-61c1857019bd%2Fjrtrvm_processed.png&w=3840&q=75)
Transcribed Image Text:44. If an ammonia plant that produces 250 tons per year cost P120 million to construct 8 years ago, what should an 800 ton per year plant cost now?
Suppose that the construction cost index has increased an average rate of 10% per year for the past eight years and that the cost capacity factor to
reflect economy of scale is 0.75.
O P670.70 million
OP580.67 million
O P710.87 million
O P615.44 million
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